FORMS OF BUSINESS COMPARED



 

FORM

 

ADVANTAGES

 

DISADVANTAGES


SOLE PROPRIETORSHIP

  • Low start-up cost/register
  • free of regulations
  • possible tax advantages
  • owner directs & controls everything
  • unlimited liability
  • difficult to raise capital investment
  • may be difficult to sell as going concern

PARTNERSHIP

  • low costs to start and easy to register
  • additional partners bring more capital and expertise
  • few regulations
  • possible tax advantages
  • unlimited liability and legal exposure for all partners
  • may be difficulty working with partners

CORPORATION

  • limited liability
  • broad investment base available
  • continuous existence with easy owner transferability
  • easiest form to raise capital
  • specialized tax treatment
  • expensive to create
  • requires on-going paperwork
  • highly restricted and regulated
  • comprehensive record-keeping
  • taxed at corporate level and at personal level when profits are distributed

 

 

 



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copyright 2001 Karen E.Hamilton